Ireland seeks to raise €1bn on bond market

Ireland will seek to sell about €1 billion worth of bonds on Thursday, in its first auction since March.

The National Treasury Management Agency, which manages funding for the Government, plans to auction a 2.6 per cent bond maturing in 2034 and a 0.55 per cent bond maturing in 2041, it said in a statement on Tuesday.

As is standard practice, the auction will be limited to its primary dealers, the NTMA added.

The auction follows a similar sale in March and comes against a backdrop of the European Central Bank (ECB) expected to cut interest rates for the first time in nearly two years next month. This is the only bond sale expected before the end of June.

The yield, or interest rate, the NTMA has to pay on the bonds will be closely watched, as will how over subscribed the auction is. The agency has so far sold about €4 billion worth of bonds this year. It is aiming to sell between €6 billion and €10 billion worth of debt over 2024.

While the ECB is still expected to start reducing interest rates from June, the pace of those cuts is not as clear cut as it had been previously. That is due to an increase in price growth in the US, which has spooked markets that inflation may be more entrenched in the world economy than had been thought. Most central banks aim to have inflation running at about 2 per cent per year.